- Buying property in Greece | Stop Losses and Limit Orders
Edited weekly euro update provided by Deane Roe of Moneycorp
Protect yourself from fluctuating exchange rates
A rally at the beginning of the week was followed by an even sharper return to base on Tuesday. After only a little hesitation the pound embarked on a downward path that saw it test €1.16 twice. A Thursday recovery almost to €1.1750 was short-lived and it opened in London this morning (Tuesday 7th July 2009) down at €1.15.60 a cent and a half down on the week.
This may look like a pretty gloomy time to invest in Greek property as the power of the Great British Pound weakens and we end up with fewer Euros. If you are currently planning to buy your Greek island villa, property contracts in Greece can take a few months to complete. Guidance from dealers in the euro are forecasting a rise to €1.20 by the end of the year and their suggestions are to either forward buy and lock in at the current commercial euro exchange rate before it dips further, or to use Stop Losses and Limit Orders.
With exchange rates constantly moving, you may not have time to watch the currency market 24 hours a day in order to achieve the best rate in your time frame. Moneycorp, foreign exchange specialists, can do this for you free of charge. They use a number of mechanisms to ensure you are protected from negative exchange rate movements, and enable you to take advantage of positive ones.
One of the options open to you is to use Stop Losses and Limit Orders. For example, if the current exchange rate of the GBP v Euro is €1.15 but you need to achieve €1.17 to be able to afford to buy your dream property in Greece, Moneycorp would set a Limit Order at €1.17. This means that if the market hits €1.17, even for a fraction of a second at 3 o’clock in the morning when you are in bed asleep your currency would be automatically bought at this level. This is a great way to have the market monitored 24 hours a day, 365 days a year for you.
Stop losses are used in a similar fashion. Imagine the current rate is €1.15, but you cannot afford your property if the rate drops below €1.13. You would like to hold on and see if the exchange rate improves in your given timeframe. A Stop Loss can be set and will be triggered if the rate suddenly plunges below €1.13. Even if it falls much lower than €1.13, you can be safe in the knowledge that you’ll still be able to afford your Greek Island home in the sun because your currency was bought for you, automatically.
It is always best to transfer currency to Greece via the commercial rate and not the tourist rate.
For information about setting up a bank account in Greece and Skopelos please see: Legal info
For more information or to find out about the best ways to transfer money to Greece and Greek Islands
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